What Severance Pay Rules Must Employers Follow in Uzbekistan?

Which Employees Qualify for Severance Pay?

• Employees dismissed due to staff redundancy or liquidation of your company, following the Labour Code procedures.
• Employees who refuse to transfer to another locality with the employer or to continue work under significantly changed working conditions.
• Employees whose employment is terminated because they are medically unfit for the role and no suitable alternative position is available.
• Employees released from military or comparable public service who cannot be reinstated to their previous job as required by law.
• Employees terminated on grounds not related to their misconduct, where the Labour Code explicitly provides for severance.
• Employees working under indefinite or fixed-term contracts, provided they have a valid employment contract governed by Uzbek labour law.

What Are the Legal Timelines for Paying Severance?

You should pay severance on the employee’s final settlement date, which in practice is the last working day or no later than the day of termination recorded in the dismissal order. Together with severance, you must also pay all accrued wages, unused annual leave compensation, and other statutory amounts. If the exact average earnings need calculation, complete this promptly using the Labour Code’s average wage rules so there is no delay. Any late payment can be treated as a wage arrear, triggering compensation for delay and potential inspections. To stay safe, align your internal policy so payroll, HR, and finance clear all termination payments on or before the final day of work.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in Uzbekistan, authorities may treat this as a violation of labour legislation and non-payment of wages. Labour inspectors can order you to correct the breach, pay the outstanding amounts, and compensate the employee for delays. In serious or repeated cases, administrative fines can be imposed on both the legal entity and responsible managers, and disputes may escalate to court. Courts can also award moral damages and interest for late payment, increasing your overall cost of non-compliance.

• Labour inspectors can issue mandatory orders to pay overdue severance and correct documentation.
• Administrative fines may be imposed on the company and its officials for labour law violations.
• Courts can order payment of arrears, interest for delayed wages, and moral damages.
• Repeated or gross violations can trigger enhanced scrutiny of all your HR and payroll practices.
• Non-compliance risks reputational damage and strained relations with employees and unions.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in Uzbekistan does not remove the need to follow the Labour Code’s severance rules. Legally, the EOR is the formal employer and is responsible for calculating and paying severance, notice, and final wages. However, your company typically funds these costs under the commercial agreement with the EOR, so poor planning still hits your budget. If you direct day-to-day work and terminations, your instructions must allow the EOR to comply with local law. A well-structured EOR relationship should clearly allocate who decides on dismissals, who approves severance amounts, and how disputes with employees are handled.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your company navigate Uzbekistan’s severance rules by embedding local labour law into every termination workflow. Your team gets guidance on when severance is triggered, how to calculate average earnings, and which documents are needed before ending an employment contract. This reduces the risk of overlooking statutory grounds, notice periods, or protected categories of employees.

With Playroll, you can plan workforce changes knowing that severance, final pay, and documentation will be aligned with Uzbek requirements. Our Employer of Record and global payroll tools coordinate HR, legal, and finance so that payments are made on time and correctly coded. That way, you protect your company from avoidable fines and disputes while treating departing employees fairly and consistently.